German consumer confidence at three-year high: GfK poll

28th September 2010, Comments 0 comments

The German economic recovery and falling unemployment has lifted consumer sentiment to a three-year high in Europe's biggest economy, the Gfk market research group said on Tuesday.

GfK's indicator of household sentiment, published for the month to come, posted a solid gain to 4.9 points from 4.3 in September, a figure that was itself revised higher thanks to increased expectations for the economy and personal incomes.

"Consumers currently expect the economic upturn to continue in the coming months," a GfK statement said.

"This is demonstrated by the sharp rise in economic expectations over the last three months," it added.

"In this context, the public clearly sees a realistic prospect of income growth, which is itself helping to stimulate the propensity to buy."

The German economy posted strong growth in the first half of 2010, and while the pace has eased since then the country is still on track for a full-year expansion of around 3.0 percent, economists and the central bank have said.

The government is expected to raise its official growth forecast of 1.4 percent in October.

"Over the past years, the GfK index has outperformed all other consumer confidence indicators as best predictor of private consumption," ING senior economist Carsten Brzeski said.

"Today's reading confirms our view of a further broadening of the German recovery."

The export-led economy is now also getting traction from domestic consumption and business investment, underpinning forecasts that it will continue to act as Europe's economic locomotive.

GfK surveys around 2,000 consumers in Germany for its poll, which is conducted on behalf of the European Commission.

"German consumers still hold the key for self-sustained growth. It looks as if they finally might be willing to use it," Brzeski said.

© 2010 AFP

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